Thursday, March 21, 2013

A billion active users of YouTube

Have you noticed that I tend to post a lot of YouTube videos here? :)

From Reuters (at Yahoo Finance):
Google Inc's YouTube said 1 billion unique users were now visiting the video-sharing website every month, or nearly one out of every two people on the Internet.

"If YouTube were a country, we'd be the third largest in the world after China and India," YouTube said in a blog post on Wednesday. (

Expanding high-speed data networks across the world and increased availability of internet-enabled smartphones have helped to connect billions of people to the Internet, fuelling growth in social media and video-sharing websites.

I believe it. And if I were a television executive, I'd be absolutely terrified of YouTube. Certainly, I spend a lot more time watching YouTube videos than watching television. It's not even close.

Then there's this:
YouTube was an instant success after its founding by three former PayPal employees in 2005, adding millions of users in its first year. Google bought it for $1.65 billion in 2006.

The fast-growing video site, which had about 800 million unique monthly users a year ago, now represents one of Google's key opportunities to generate new sources of revenue outside of its traditional internet search advertising business.

Google does not break out revenue from advertising on YouTube, which is a free site, but its contribution in terms of Google's overall revenue is relatively small.

How would you like to create a company and then sell it - one year later - for 1.65 billion dollars? Not a bad investment, huh?

Of course, like any corporation, Google's interest is entirely in making as much money as it can. And a free YouTube doesn't seem to be doing that, despite the huge user-base.
AdAge reported in January that Google planned to offer paid subscriptions to some content later this year.

YouTube had reached out to several video producers, asking them to submit applications to create for-pay "channels," AdAge said, adding that the first such channels could be available by the second quarter for between $1 and $5 a month.

That's fine (though just another thing for television producers to worry about), but what then? If YouTube has paid channels, then all those free videos will be competition to them.

Right now, those free videos attract customers and make Google some money from advertising revenue (if not as much money as they'd like). But what happens when those free videos turn into unwelcome competition for their new paid channels?

How long will Google even tolerate free videos after that? What happens with even a grudging tolerance? Will users see more and more restrictions?

Will Google kill the goose that laid the not-quite-golden-enough egg? I guess we'll see, huh? Meanwhile, maybe we should enjoy YouTube while we can.

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